4.7.1 - Definitions of inflation & deflation
Topic 4.7.1 - Definitions of inflation and deflation Inflation is the sustained increase in the average price level in an economy over time. Inflation reduces the purchasing power (or value) of money. This is because higher prices in the economy mean that fewer goods and services can be bought with the same amount of money. For example, the UK's cost-of-living crisis, which began in 2021 and peaked during 2022-2023,...